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NEW YORK — Wall Street strategists expect U.S. stocks to end 2022 above current beaten-down levels but some warned of turbulence on concerns inflation and aggressive interest rate rises crimps economic growth and unnerves investors, a Reuters poll found.

The benchmark S&P 500 will end this year at 4,400, based on the median forecast of 43 strategists polled by Reuters over roughly the last two weeks. That would be a 10.7% gain from Monday’s close.

But strategists have been revising down their year-end forecasts after the recent sharp sell-off, including Credit Suisse Securities, which cut its year-end S&P 500 target to 4,900 from 5,200 earlier this month.

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The S&P 500 is down more than 16% since the start of the year, with the war in Ukraine and COVID-19-related lockdowns in China adding to the long list of worries for investors.

Last week the index came close to confirming it has been in a bear market since hitting a record closing high on Jan. 3. Closing down 20% from that peak would confirm it has been in a bear market since reaching the high, according to a common definition.

That would be the S&P 500’s second bear market since the 2020 global sell-off caused by the coronavirus pandemic. The Nasdaq, which has led the market’s fall, is down nearly 30% from its all-time closing high in November 2021.

Slightly more strategists in the poll said they saw volatility as likely to increase in the coming months rather than decrease.

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The Cboe Volatility Index, known as “Wall Street’s fear gauge,” is around 29 compared with a long-term median of nearly 18.

“The market is trying to decide whether there’s going to be a recession later this year,” said Paul Christopher, head of global market strategy for Wells Fargo Investment Institute in St. Louis.

“Inflation and the Fed are like a dial that have been increasing the pressure on the economy,” he said. “By the time we get to the end of this year, inflation will have come down from where it is now, and the direction will be clear.” Wells Fargo expects the S&P 500 to end this year at 4,300.

The Fed has promised to keep lifting U.S. interest rates until inflation is tamed.

Corporate results from major U.S. retailers last week fueled concerns consumers are cutting spending in the face of higher gasoline and other prices, with Walmart reporting disappointing quarterly results and cutting its full-year outlook.

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“These retail earnings reports last week are pretty indicative – you’ve got a strong consumer, but they’re changing their shopping habits right now,” said Anthony Saglimbene, global market strategist at Ameriprise Financial.

He and other strategists said consensus Wall Street estimates for profit growth this year are still too high, given the inflation and rate outlook.

S&P 500 earnings are estimated to grow 9.3% in 2022 from a year ago, and that estimate is up from 8.8% at the start of April, according to IBES data from Refinitiv.

At the same time, valuations have come down since the start of the year, and strategists say that’s making some beaten-down areas of the market start to look attractive.

The S&P 500’s forward 12-month price-to-earnings ratio is down to 16.6 from 22.1 at the end of December and is near its long-term average of about 16, based on Refinitiv data.

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“Technology is getting more attractive,” Saglimbene said. “Obviously there’s probably more pain if we’re going to continue to slide, but there are opportunities being created in high quality tech right now.”

Based on the poll, the Dow Jones industrial average will finish the year at 34,500, up 8.2% from Monday’s close.

(Other stories from the Reuters Q2 global stock markets poll package:)

(Reporting by Caroline Valetkevitch; additional reporting by Sinead Carew, Chuck Mikolajczak, Stephen Culp and Alden Bentley in New York and Noel Randewich in San Francisco; additional polling by Milounee Purohit and Vijayalakshmi Srinivasan in Bengaluru Editing by Nick Zieminski)